Over the last nearly 50 years the biggest gain for US households
has been the 16.6 percentage point increase in the share of high-income
households earning $100,000 or more per year, which accounts for the declining
share of low-income and middle-income households (by two different measures).
Yes, the middle-class has been disappearing over the last generation or more,
but they have moved into higher-income categories of household income, not
moving down into lower-income categories of household income.

“Cooking the Books”

Of course, Perry is a recognized economist, and I’m just a
smart-aleck with a computer and three credit-hours in Econ 201. But I’m also a
son of a bookkeeper, and have seen many interesting tricks people can play with
numbers. Science is heavily dependent for its effectiveness on the honesty by
which it applies numbers to phenomena, and is therefore vulnerable to anyone
who knows how to “cook the books”. And the “dismal science”, like the others,
tends to suffer when the numbers collide with policy preferences.

The picture Perry paints is of a middle class that was
better off in 2014 than it was in 1967 — at the very least, that said middle
class is making more money even after inflation is taken into account. However,
to get an apples-to-apples comparison, he has to account for inflation. And
here’s where the problem begins: there are a number of tools an analyst can use
for inflating and deflating number … but none of them are 100% accurate. (For a
comparison of four common price indexes used in policy analysis, see
this post in The FRED Blog.)

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This site is not an official organ of the Holy Catholic Church.The opinions expressed on this blog are solely those of the author, and are not to be construed to express the opinions of the Holy See or the Dioceses of Fort Worth and Dallas. Doctrinal discussions should be considered authoritative only so far as the relevant official documents of the Catholic Church are quoted; any errors of interpretation or explanation are the author's alone, and I would appreciate correction.

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